S N CHAWLA Vs. BANK OF INDIA

JUDGEMENT

(1.) THIS is a complaint filed by complainant and his wife alleging deficiency in the service of the Bank of India.

(2.) SHORTLY stated the facts are, the first complainant is Ex-Chairman and Managing Director of the Company named IBEL Machines Limited registered at Bhopal and has obtained loan from the opposite party for the business of the Company. As the said Company was again in urgent requirement of finances had applied for additional loan facility. On 17-2-1989, the complainants pledged shares and debentures held by them jointly against the additional loan. Both of them signed the transfer form and no objection was obtained from second complainant for creating securities with the opposite party. At that time, the total value of the shares and debentures prelevant in market were at Rs. 77,545 and present value is Rs. 97,500/-. On 5-4-1989, second complainant withdrew the shares of JBA Maisore and replaced them with shares and other debentures of another company. The complainant, therefore, alleged that despite due compliance of the formalities as required by the opposite party, the complainant was not disbursed the additional loan. The complainants now alleged that since no additional loan was granted to them, there was no reason for the opposite party to withhold the shares and debentures pledged by the complainants for the additional loan. The complainants alleged that despite their repeated demands, till the filing of this complaint, their shares and debentures are not returned to them. The complainants also claimed Rs. 1,00,000/- as compensation.

(3.) IT is also contended by opposite party that the complaint is barred by limitation inasmuch as the complaint is filed in 1992 when the cause of action arose in 1989. The facts alleged show that the shares and debentures were lying with the Bank over the period from 1989 and despite several repeated demands made by the complainants, the shares and debentures were not returned to the complainant. Therefore, there is a continuous cause of action for the complainants claim till the shares and debentures are not returned to them by the opposite party. Lastly, a technical objection has been raised by the opposite party that the Bankers General lien under section 171 of the Indian Contract Act operates against the shares and debentures pledged by the complainants with the opposite party and, therefore, also the complaint is not maintainable claiming back the value of the shares and debentures.